Fannie, Freddie see $8.8B income in 2Q, up from $2.4B in 1Q

October 13, 2015

WASHINGTON (10/13/15)--Quarterly income for Fannie Mae and Freddie Mac rose to $8.8 billion in the second quarter of 2015, up from $2.4 billion in the first quarter. The Federal Housing Finance Agency (FHFA) published its quarterly performance report for Fannie, Freddie and the Federal Home Loan Bank (FHLBank) Program last week.

According to the report, the gains on derivatives for Fannie and Freddie of $5.6 billion were driven by an increase in medium and longer-term swap rates during the quarter. Loan loss reserves also decreased by $2.2 billion during the quarter.

“Earnings during the quarter also benefitted from rising house prices, combined with the continued decline in the number of delinquent loans guaranteed by the Enterprises,” the report reads.

In addition, Fannie and Freddie both increased the dollar volume of mortgage-backed security issuances in the second quarter.

In the second quarter, Federal Home Loan Bank aggregate income fell to $669 million, down from $1.023 billion in the first quarter of 2015. According to the report, the FHLBank of San Francisco received a $459 million private-label mortgage-backed securities litigation settlement in the first quarter of 2015 and the FHLBank of Boston received $135 million in litigation settlements in the second quarter of 2015, elevating income in both periods.

When the settlements are excluded, the FHLBank system decreased by only $52 million.

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